Tarn, 


Duke  University  Libraries 

Communication  o 

Conf  Pam  #362 


COMMFNTC^TION  OF   SECRETARY  OF   TREASURY. 

TuEASURY  Department,  C.  S.  A.  | 

Richmond,  Februray  20,  1865.  \ 

Hon.  Thos.  S.   Bocock,  Speaker  of 

the  House  of  KeprcHenUvtivos: 

Sir-  1  have  the  honor  to  transmit  hcrewitli  a  copy  of  the  report 
made  to  this  Department,  uTider  date  of  December  26th,  1864,  by 
the  A^ront  of  the  Treasury  in  the  Trans  Mississippi  Department. 

I  recommend  the  passage  of  an  Act  to  repair  tlie  defects  and 
render  complete  the  orcranization  of  the  Agency,  in  accordance 
with  the  snggessions  of  Hon.  P.  W.  Gray,  Agent. 

Very  respectfully, 

G.  A.  TRENHOLM, 
Secretary  of  Treasury. 


COMMUNICATION  OF  THE  TREASURY  AGENT. 

C.  S.  Treasury  Agency,  T.  M.  D.,         ( 
Marshall,  Texas,  Dec.  26,  1864.  \ 

Hon  G.  A.  Trenholm,  Secretary  of  ^     Tr„ 

the  Treasury,  Richmond,    Va. 

Report  of  the  operations  of  this  Agency,  desired  by  you  in  your 
letter  of  29th  September  last,  has  been  necessarily  delayed  by  the 
press  of  business  engaging  my  attention. 

In  March  last,  I  received  my  appointment  as  Agent,  at  Kich- 
mond  Va.  As  speedily  as  practicable,  I  made  my  way  across  the 
Mississippi,  and  through  the  enemy's  lines  in  Louisiana,  arriving 
inlTexas  early  in  April.  Immediately  upon  my  arrival,  such  instruc- 
tions were  given  to  Treasury  officers  as  were  deemed  necessary  un- 

der  the  currency  and  tax  acts.      ,  ,^  .         r  ^u^   Tr-ono 

After  conference  with  the  Military  Commander  of  the  Irans- 
Mississippi  Department,  according  to  instructions,  it  was  deemed 
advisable  to  establish  this  Agency  at  Marshall,  as  a  P'^int  within 
reasonable  distance  from  his  headquarters  Notice  was  given  that  the 
Acencv  would  be  organized  on  the  1st  July.  Meantime  my  whole 
attention  was  given  to  the  necessary  arrangements  lor  the  work 

Great  difficulty  was  experienced  in  procuring  even  a  small  quantity 
of  stationery  and  blank  books,  at  enormous   prices,    ^o  building 


for  offices  could  be  procured  at  Marshall,  until  an  old  dilapidato<l 
Academy,  extremely  inconveniert  at  best  for  the  transaction  of 
business,  could  be  repaired  by  mechanics  detailed  by  the  military 
authorities. 

The  same  aid  was  necessary  to  procure  even  a  few  tables  and 
desks,  which  had  to  be  made,  and  the  supply  of  tlieni  has  been  very 
limited.  The  need  of  blank  forms,  and  the  Regulations  of  the 
De))arfment  for  the  transaction  of  business  in  the  difierent  branches, 
was  attempted  to  l)e  supplied  by  enquiry  of  the  different  officers  for 
them.  Few  could  be  found,  because  the  officers  themselves  had  not 
been  supplied  with  them:  but  a  supply  of  such  as  were  procured, 
was  printed  under  my  direction. 

The  few  clerks  transfeired  from  Richmond,  were  only  informed 
of  the  special  duties  pertaining  to  the  offices  in  which  thev  had  been 
engaeed  No  one  familiar  with  the  general  routine  of  business  in  the 
department  was  sent,  as  was  promised  nie  by  your  predecessor,  when 
1  agreed  to  accept  the  office  on  that  assurance.  In  consequence, 
there  was  grcdt  inconvetiience  suffered,  delay  has  ensued  and  errora 
committed. 

There  was  also  difficulty  in  ensraging  the  services  of  clerks  of 
any  kind,  for  the  small  compensation  allowed  by  law,  under  the 
limitations  imjjosed  by  the  regulations  of  your  predecessor. 

The  ("omjitrollor.  Hon.  T.  II.  Kennedy,  rf.j)orted  his  arrival  at 
Marshall  the  I'Jth  of  May.  The  Auditor,  Major  D.  F.  Shall,  ariived 
on  the  1 8th  .July.  He  did  not  receive  his  commission  until  about 
the  first  of  that  month,  it  having  been  miscarried. 

Yet  the  Agency  may  be  considered  as  having  born  organized  for 
business  on  the  first  day  of  July,  and  its  regular  transactions,  re- 
ports and  acc<  unla  date  from  that  day. 

The  indefmiterirss  of  the  act  of  Congress  providing  for  this 
Agency,  and  of  the  regulations  of  the  Secretai-y,  defining  the  pow- 
ers of  the  Agent,  left  it  in  doulit  whether  the  functions  of  the 
Agency  were  to  be  assimilated  in  all  re.spect8  to  those  of  the  Trea- 
sury Department,  or  whether  the  Agency  was  to  be  regarded  main- 
ly as  a  medium  for  the  transmission  of  returns,  accounts,  <tc.,  to 
Richmond.  JJcrce  no  thorough  system,  such  as  exists  in  the  Trea- 
sury Department,  has  been  completed.  With  your  ojqirobation, 
however,  it  is  now  designed  to  assimilate  the  operations  heie  in  all 
respects  to  those  of  the  Department  at  Richmond,  as  is  believed 
was  the  intention  of  Congress  in  providing  for  the  establishment 
of  the  Agency.  I  am  satisfied  it  is  only  in  this  way  that  it  can  be 
made  effective  and  useful. 

In  consequence  of  the  want  of  this  system,  and  becnuse  the  De- 
positaries have  been  pressed  with  business,  under  the  currency  act ; 
and  in  many  instances  have  been  poorly  supplied  with  clerical  assis- 
tance, and  even  with  the  stationery  necessary  to  make  their  full  re- 
turns, I  am  unable  to  make  as  satisfactory  a  report  of  the  receipts 
of  public  moneys  as  is  desirable. 

Ab  nearly  as  I  can  astertain  from  the  returns  of  the  various  Trea- 


surj  olficcrs,  the  followiu<j:;  have  been  the  amounts  received  or  col- 
lected from  all  sources  to  the  1st  October,  and  reported  to  this 
Agency,  viz  : 

Four  per  cent,  bonds,  under  act  of  l7th  Feb.,  1864,  $46,469,100  00 
Four  per  cent,  bonds,  by  States,  under  act  14th  June, 

1864,  413,500  00 

War  Tax,  5,768.457  42 

Sequestration  fund,  1,366,012  95 

Military  exemption  fund,  10,000  00 

Customs,  56,278  51 

Export  duty  on  cotton,  9,0l2  15 

Light  house  money,  130  15 

Tax  on  currency  since  1st  July,  649,175  34 

Repayments  by  disbursing  officers  32,173,865  32 

Treasury  notes,  new  issue,  from  Richmond,  8,000,000  00 

$94,915,621  84 


Expenditures  up  to  the  same  date  have  been  as  follows,  viz : 

War  Department,  $5,950,000  00 

Navy  Department,  156,000  00 

Civil  and  miscellaneous,  including  customs,  314,972  27 

$6,420,972  27 


Balance  in  the  Treasury,  $88,494,640  57 
This  balance  consists  of  the  following,  viz  : 

New  issue  notes,  $1,255,486  07 

Old  issue  Treasury  notes,  74,383,652  69 

Drafts  drawn  at  Richmond,  12,790,000  00 

Coin  and  coupons,  05,510  81 

$88,494,649  57 


To  this  apparent  balance  should  be  added  the  balances  in  the  hands 
of  Depositaries  on  the  30th  of  June  last,  excepting  the  sum  of 
$45,556,700,  which  was  received  by  them  before  that  date,  for  fund- 
ing in  bonds,  under  the  act  of  17th  February  last,  and  is  included 
in  the  foregoing  statement. 

The  amount  of  old  issues  of  Treasury  notes  deposited  for  four 
per  cent,  bonds,  under  act  of  17th  February  and  l4th  June,  1864, 
up  to  October,  1864,  was  $47,040,401  00 

The  amount  deposited  for  exchange  of  issues  under 

same  acts,  and  the  same  date,  was  1,887,522  00 

Making  a  total  of  the  old  currency    retired  to  that 

date  of        .  $48,927,923  00 


•  4 

Since  that  date  there  has  ])een  deposited  for  exchange  of  issues 
the  sum  of  $5,497/218  00 

And  for  fundin;^-  in  l»ond.s.  under  t^aid  act^5,  the  sum  of         369,345  00 
Making  a  total  of  old  currency  retired  to  this  date  $54,794,486  00 
Statements   are   herewith  sulimitted,  showing   the    transactions 
above  set  forth,  moi'C  in  detail. 

It  is  almost  impossible  to  make  a  reliable  estimate  of  the  amount 
of  old  currency  outstanding  on  the  1st  October.  As  a  mere  sur- 
mise, I  should  say  about  lit'ty  millions  of  dollars. 

In  July  last  there  was  received  from  the  Register  eighteen  mil- 
lions of  coupon  bonds,  issued  under  the  act  of  February '20th,  18G3, 
viz:  Eight  per  cent  bonds,  9,000,000  00 

Seven         "         "  9,000,000  00 

These  bonds  have  been  distril)uted,  a-*  far  as  lequired,  to  Deposi- 
taries and  Produce  Loan  Agents,  to  redeem  tiic  certiticates  issued 
by  the  former,  for  deposits  for  funding  in  bonds,  under  the  funding 
acts  of  1863,  and  by  the  latter  for  purchases  of   cotton. 

Much  of  my  time  and  attention  has  been  occupied  in  representing 
the  Commissioner  of  Taxes,  supervising  the  execution  of  an  intricate 
and  compleie  system  of  taxation,  extremely  ditlicuU  of  execution. 
The  unequal  effects  of  the  discriminations  made  r)y  these  laws,  have 
produced  great  dissatisfaction. 

The  efforts  to  reach  speculators  and  extortioners  have  failed  to 
attain  their  purpose,  but  in  many  instances  operate  harshly  on 
classes  whose  interests  ought  to  be  protected  rather  than  taxed. 
The  taxation  of  bonds  and  securities  of  the  government  has  ope- 
rated most  unjustly  in  this  aepariment,  where,  until  recently,  large 
amounts  due  in  bonds  had  not  been  paid,  but  only  certiticates  were 
held  for  them,  on  which  the  interest  had  not  been  generally  paid. 
The  tax  on  coin,  bullion,  ttc,  to  be  paid  in  kind  or  in  Treasury 
notes  at  their  relative  value  to  coin,  to  be  fixed  Ity  the  commission- 
er, is  an  odious  discrimination,  accomplishing  little  good,  while  its 
iroral  effect  is  highly  injurious  ;  because  it  creates  the  impression 
that  thereby  the  government  depreciates  its  own  currency.  iSuch  a  tax 
ought  to  be  uniform  with  others  payable  only  in  kind,  or  else  levied 
at  a  higher  rate,  payable  in  currency. 

The  provision  allowing  credit  to  planters  on  their  property  or 
capital  tax,  lor  the  value  of  their  income  or  tithe  tax,  operates  favor- 
ably to  those  who  have  been  prosperous,  while  those  who  have  been 
unfortunate  or  driven  from  their  farms  by  the  enemy  are  required 
to  ])ay  the  full  money  tax  on  their  property,  is  manifestly  unjust. 

The  State  collectors  have  been  diligent  in  tiieir  duties,  though, 
from  the  depreciation  of  the  cunency,  it  has  been  so  arduous  a  task 
that  nothing  Imt  their  patiiotic  sense  of  duty  has  induced  them  to 
continue. 

The  work  of  assessing  and  collecting  was  put  in  execution  in 
Texas  and  West  Louisiana  l)y  the  elVicicnt  Chief  Collectors  in  Sep- 
tember, ft  has  been  delayed  in  Arkansas  by  the  want  of  necessa- 
ry stationery. 


The  excellent  State  collector  of  that  State  at  length  succeeded  in 
procuring  a  supply,  and  is  now  pushing  forward  the  work  as  speed- 
ily as  can  be  expected. 

The  amount  reported  to  have  been  collected  for  taxes,  i3  chiefly 
of  those  due  under  the  Tax  Act  of  18G3,  The  additional  taxes 
leried  in  February  and  June,  1864,  arc  now  being  collected,  and 
will  absorb  a  large  amount  of  certificates  for  bonds  and  old  issue 
currency.  It  is  estimated  that  the  taxes  which  will  be  realized  un- 
der these  acts  will  exceed  twenty-five  millions  of  dollars. 

Under  the  Currency  Act  of  February,  much  the  larii^est  portion 
of  Treasury  notes  lundcd  for  bonds  prior  to  1st  July,  was  in  the  de- 
nomination of  one  h'undred  dollars.  The  object  of  the  people  in 
funding  seems  to  have  been  merely  for  the  purpose  of  paying  their 
taxes  with  the  certificates. 

The  effect  of  the  provision  allowing  this  procedure  has  been 
merely  to  throw  a  vast  labor  on  the  Treasury  officers  in  receiving 
the  notes  and  issuing  certificates  in  inconvenient  amounts  for  use 
in  paying  taxes,  and  thus  complicating  accounts  and  embarrassing 
the  tax  officers  in  receiving  the  certificates  given  for  the  notes, 
while  the  same  end  could  have  been  attained  by  allowing  the  notes 
themselves  to  be  received  for  taxes,  prior  to  a  given  date.  The 
process  has  caused  great  labor,  expense  and  complication,  and  pro- 
duced inconvenience  and  dissatisfaction  without  corresponding  ben- 
efit to  the  government. 

The  provision  of  the  C/Urrency  Act,  taxing  the  Treasury  notes 
and  requiring  exchange  of  issues,  (in  other  words  demonetizing  the 
currency)  has  been  attended  wilh  equal  inconvcniei  ce  and  labor, 
and  great  dissatisfaction  has  been  produced  by  the  delay  in  produ- 
cing the  new  Treasury  notes  for  exchange.  Of  new  issue  notes, 
the  whole  amount  received  to  this  date,  has  only  been  sixceen  mil- 
lions out  of  the  large  sum  of  two  hundred  and  eighty-three  millions, 
reported  to  have  been  issued  from  the  Treasury.  The  demand  in  the 
department  for  the  necessary  disbursments  for  the  military  service, 
has  absorbed  nearly  all  that  has  been  issued  west  of  the  Mississippi. 

in  consequence  of  delay  in  sending  forward  funds  needed  last 
year,  a  large  accumulation  of  indebtedness  prior  to  the  1st  July, 
estimated  by  the  Commanding  General  of  the  department  to  amount 
to  the  sum  of  $66,333,099,  on  the  30th  September.  Twenty  mil- 
lions of  old  Treasury  notes  was  received  by  depositaries  in 
April  and  May,  but  very  little  of  it  could  be  used  in  payment  of 
debts,  the  lime  for  the  tax  on  curreticy  being  near  at  hand,  and  the 
creditors  consequently  unwilling  to  receive  them.  The  pay  of  the 
army  was  in  arrear  for  over  twelve  months,  and  other  branches  of 
the  service  at  a  stand  for  want  of  funds. 

Military  requisitions  have  been  therefore  necessarily  met  in  prefer- 
ence to  the  claims  of  the  people  for  exchange.  They  have  been  com- 
pelled to  receive  certificates  for  exchange,  redeeir;able  when  the  new 
notes  ehould  be  received,  until  which  time  they  must  be  unproductive 
capital  in  their  hands. 


The  recent  ariival  of  a  supply  of  the  six  per  cent,  non-taxable 
bonds,  of  the  five  hundred  million  loan,  has  enabled  me  to  offer  a 
means  of  investment  which  has  been  ])romptl}'  availed  of  to  a  consid- 
erable extent,  at  a  premium  of  fifty  per  cent,  in  new  currency,  or  its 
equivalent  in  old,  witli  the  accrued  interest  added.  In  order  to  re- 
lieve those  who  could  not  afford  thus  to  invest  io  bonds.and  who  need- 
ed their  money  to  pay  their  taxes,  I  felt  it  my  duty  to  authorize  the 
tax  collectors  to  receiv^c  these  certificates  for  exchange  in  i)ayment  of 
taxes,  as  cash  in  the  currency  which  they  represent.  I  am  aware  of 
the  serious  objections  to  this  step,  but  I  deemed  it  wiser  to  encoun- 
ter them  than  to  impose  unjust  burdens  upon  a  people  who  had  so 
patiently  acquiesced  in  themeasuresrcquiring  them  to  receive  these 
certificates  in  lieu  of  the  Treasury  notes  promised  and  due  them. 
Either  the  collection  of  the  taxes  due  from  parties  holding  such 
certificates  ought  to  be  suspended  until  the  government  shall  be 
able  to  redeem  tliem,  or  else  the  certificates  themselves  should  be 
received.  This  arrangement  has  been  generally  approved,  and  has 
afforded  much  relief,  thus  preventing  cause  of  complaint. 

1  would  respectfully  call  your  attention  to  the  necessity  of  amend- 
ments to  the  laws  providing  for  the  organization  of  this  agency. 

iBt.  There  is  no  provision  for  a  Treasurer,  to  whom  the  accounts 
of  the  several  depositaries  should  be  rendered,  and  under  whose 
directions  they  should  act.  Such  an  office  should  be  created  as  a 
Bureau  of  the  Agency,  that  its  operations  may  be  harmonious  and 
corres-pondent  with  those  of  the  Treasury  proper.  The  substitution 
of  a  depositary  for  this  purpose,  oven  if  sanctioned  by  law,  is  but 
an  inconvenient  arrangement. 

2d.  The  functions  of^  the  Agent  are  too  much  diversified  for  one 
person.  As  now  constituted,  the  Agent  has  not  only  to  superintend 
and  direct  as  the  representative  of  the  Secretary  of  the  Treasury, 
but  personally  to  perform  duties  which,  at  Richmond,  are  divided 
among  various  fmreau  officers.  Each  of  these  should  be  placed  un- 
der a  seperate  head,  with  a  salary  annexed  adequate  to  compensate 
officers  of  ability  to  understand  and  control  them,  corresponding  to 
the  similar  offices  at  Richmond. 

3d.  No  provision  has  been  made  to  meet  the  contingency  of  a 
vacancy  from  death  or  resignation,  or  inability  to  perform  the  du- 
ties of  the  oilice  from  sickness  or  absence.  The  same  defect  exists 
in  the  cases  of  tiie  offices  of  Ccmptroller  and  Auditor. 

The  act  cstablis-hing  tlie  Bureaux  of  Comptroller  and  Auditor 
also  needs  amendment  The  (Jaiuptroller's  duties  correspond  with 
those  of  the  similar  office  at  Richmond,  yet  no  provision  is  made 
that  he  shall  have  custody  of  the  bonds  of  officers  acting  in  these 
states — nor  that  he  may  direct  suit  in  cases  of  defalcation.  He 
ought  to  bo  authorized  to  act  to  the  same  extent  as  the  Comptroller 
at  Richmond. 

Tl'.e  Auditor  is  required  by  the  act  to  perform  the  duties  of  each 
of  the  Auditor's  offices  at  Richmond,  including  the  adjustment  of 
rostoffice  accounts.     Yet  no  provision  is  made  that  ho  may  adminis- 


ter  oaths  when  necessary  in  the  discharge  of  his  duties.  He  is  also 
required  to  act  as  Register  of  the  Treasury;  but  the  regulations  of 
the  Secretary  require  bonds  to  be  sent  to  and  placed  in  custody  of 
the  Principal  Depositary,  who  is  also  required  to  endorse  and.  dis- 
tribute them.  It  would  seem  more  appropriate  that  these  bonds 
should  be  placed  in  custody  of  the  officer  acting  as  Register,  and  be 
distributed  and  endorsed  by  him. 

Moreover,  the  duties  of  Register  ought  not  to  be  performed  by 
an  officer  burdened  with  the  duties  imposed  on  the  Auditor,  but  by 
a  distinct  Bureau,  or  division,  with  a  competent  and  iosp")U'-<il)lo 
officer  at  its  head. 

1  submit  herewith  reports  from  the  Comptroller  and  Auditor, 
showing  the  operations  of  their  offices;  and  specially  recommend  to 
your  consideration  their  statements  of  the  diffi(ulties  attending  the 
settlement  of  accounts  for  moneys  advanced  to  officers  from  the 
Treasury  at  Richmoid,  and  which  originated  belore  the  organiza- 
tion of  this  Agency. 

I  am,  very  respectfully,  vour  obedient  servant, 

(Signed)  *  P.  VV.  GRAY, 

Agent  Treasury  T.  M.  D. 


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